Mueller Water Products to cut execs’ pay, furlough workers

In recent weeks, the U.S. recession and global economic slowdown have led to a parade of layoff announcements by some companies while others have fled into the arms of federal bankruptcy protection.

But one Atlanta company hurt by the recession is trying to buck that trend.

Mueller Water Products, which last week reported a net loss of $400 million, will temporarily furlough all employees at its 26 plants nationwide. The company has about 5,900 plant workers and 55 employees at its headquarters.

Also, the company’s board of directors, Chairman and Chief Executive Officer Gregory E. Hyland, his direct reports and one division president will take 20 percent pay cuts. Other salaried employees will either have their work week reduced to 36 hours or have their base pay reduced or both.

Shares of Mueller, which lays the pipes and hydrants in pre-building phases of residential development projects, rose 23 cents, or more than 6 percent, to close Monday at $3.92. They’re still under pressure, though; Mueller shares have fallen more than 53 percent since January.

Mueller isn’t saying how much money the company will save by making these moves. But the company’s three divisions will decide individually the timing and frequency of the shutdowns. The closures could last a few days to a week.

John Pensec, a Mueller spokesman, said Monday it was important to senior executives to send a message that executives also would be expected to sacrifice, not just the rank and file.

“It’s not easy, but we would much rather reduce hours than jobs,” Pensec said, adding executives are hoping that by spring some development projects could come online. “We’re trying to share the pain a little bit.”

But its also a little bit of a defensive strategy. Laying off workers outright could leave a company strapped when the economy rebounds.

If housing construction sees any sort of growth, Mueller wants to be positioned with its workforce to take advantage of that, Pensec said.